It's costly, and at this stage it's not going to determine much regarding software support. Third parties will continue to support both for the rest of the generation, and both companies have already sunk a huge amount of money into the fight. They may as well take it a little easier and make some profit. Both should focus on software and making themselves into competitors for the Wii.
If one continues to be aggressive and the other doesn't, they'll largely be only hurting themselves as despite the increase in hardware they would sell, software support is the biggest determinant in the console war and they'll both likely get much the same support from here on out.
A game I'm developing with some friends:
www.xnagg.com/zombieasteroids/publish.htm
It is largely a technical exercise but feedback is appreciated.
